How Uber and Lyft were driven from Austin and replaced with a worker cooperative

Two years ago, what is now the third-largest worker-owned cooperative in the United States couldn’t get more than a dozen people together. That might be hard to believe, because they all have their own transportation. They’re cab drivers.

It was early October, notoriously one of the most uncomfortable times of the year in Austin, Texas, when the temperature often still reaches 100 degrees Fahrenheit. Victory seemed out of reach then for the Taxi Drivers Alliance of Austin, which had convinced about 20 percent of the city’s cab drivers — mostly older immigrant men, from Ghana, Sudan, Jamaica, Pakistan and many other places — to pay annual union membership dues. Because drivers are classified as independent contractors,   taxi unions often have trouble getting traction. But times were especially tough for drivers in Austin, who were having trouble competing with Uber and Lyft — which were operating openly (and illegally) in defiance of local laws — and squeezed by the city’s three cab companies, who charged each driver around $280 per week just for the permission to get behind the wheel, to say nothing of the costs of actually leasing a taxi and putting it on the road. And because of the competition from Uber and Lyft, cab companies were raising their fees on drivers to make up for lost revenue.

The union was scarce on momentum; most meetings were drawing five to 10 people. The slim participation was not for lack of solutions to the many problems confronting drivers. The union’s elected leaders had solid proposals for capping the fees drivers were charged and for cracking down on Uber, whose cars didn’t have to meet the same requirements imposed on taxis, like buying insurance that covered passengers in case of accidents and maintaining wheelchair-accessible vehicles.

Scheduling meetings with city council staffers or testifying at the Transportation Commission — a toothless, mostly ignored city agency — hadn’t gotten them results or new members. The union still didn’t even represent a majority of the city’s more than 800 cab drivers after five years in existence. Some drivers had urged them to be more aggressive in confronting cab companies. But many of the officers had been academics or business owners in their home countries; they weren’t comfortable with confrontation, and they had grown accustomed to being ignored.

Growing their base through conflict 

That began to change one day in October when five younger drivers showed up to a union meeting. On their phones they had photos of a notice that had gone out to drivers of the largest cab company notifying them that the terms of their lease agreements would be changing. The company would also be advancing a proposal to the Transportation Commission requiring drivers to let it re-lease their cabs for the hours they weren’t “on duty” — a proposal they called “double-shifting,” but that the drivers dubbed “double profits.”

The young cabbies showed off dozens of WhatsApp text message chains, all of drivers complaining angrily about the latest abuse of the company’s power. The union leaders sympathized; they had seen similar tactics in the past. “Maybe we could circulate a petition,” one offered half-heartedly. But most fell back on their organizing comfort zone. “We could try to schedule a meeting with the company to discuss it with them,” another suggested. The young drivers’ eyes started to glaze over; they knew the company wouldn’t listen. Only one person took a different line. “What if we forced them to back off?” he said. The younger drivers looked up from their phones. “How could we do that?” one asked.

“What if we got a lot of drivers here, to a meeting, then got them to take small actions registering their defiance, like showing up all together to deliver that petition, and demanding a meeting with the company’s general manager — with all 50 of us?” someone said. “If he blows us off, we’ll head to city hall, and we’ll park all of our cabs around city hall, at rush hour. We’ll announce that we’re holding a ‘taxi auction’ to demonstrate how the company can hold us hostage under current laws, and shame the politicians for not doing more to stop them.”

One of the new drivers picked up the action brainstorm, saying: “and if the people at city hall don’t help us, we’ll organize a strike. No one pays the company for two weeks. We’ll occupy the cabs. They don’t have much money in reserve; we’ll hit them where it hurts.”

The others nodded their heads. “I could get 10 more guys to come to a meeting, easy,” one driver said. The union officers signed off on a special meeting, if a little unsure about where it might lead. Only one of the young drivers had been a member of the union at the start of the meeting, but by the end they had all paid their dues.

They scheduled a “crisis” driver meeting for a week later, and spent the coming days handing out flyers at the taxi airport holding lot, sending texts and making calls. Sixty-five people showed up to the next meeting, a new record for the union. Before it started, volunteers worked the crowd, signing up drivers as paid members. In small groups, they talked about the history of abuses by cab companies and discussed an escalation plan: first, dramatize the problem; then, demonstrate their opposition and attempt to negotiate; then escalate to cutting off the driver fees the company needed to operate. But they knew they needed more drivers to really be a threat. At the end of the meeting, each person was asked to pull out their phone and call one driver — and text two more — to invite them to the next meeting, a week later.

The momentum continued to build. Over 120 drivers packed the Texas AFL-CIO auditorium the following week. A guest speaker from a group of immigrant construction workers that had successfully used dramatic direct actions to win wage protections from the city gave a short presentation on their campaign escalation. The drivers were buzzing with energy as they weighed in on the proposed action plan, which would start with a “drive-in” at the next Transportation Board meeting the following Tuesday afternoon to quickly raise public awareness of Yellow Cab’s exploitation. After the meeting many drivers remained in the parking lot debating the merits of the union or whether they could really get the city council to act, and dozens stayed late to color in signs with taglines like “Sharecropping on Wheels” and “Make the Companies Pay.”

Conflict in view and under the surface

By this point, many in the elected union leadership were getting nervous. They were worried about what might happen — would the cab company attack back in a way they couldn’t anticipate? Would they lose their cordial relationships with company staff and city employees? Under the surface, fears brought from many of their home countries simmered. To some, acting out publicly raised the specter of being jailed for dissent. These tensions spilled over into open conflict in leadership meetings; some in leadership were resentful that the new members were asserting themselves so forcefully at all.

The new union activists didn’t feel much loyalty towards elected city officials, and they couldn’t understand why publicizing their grievances would bring them harm. “If anything,” one argued, “aren’t we suffering because we aren’t visible enough? Our problems are easy to ignore if we’re only raising them behind closed doors.” Their willingness to engage in conflict with outside targets, and to hang in with arguments between union leaders, proved decisive in unleashing the taxi union’s power.

By the day of the protest, a few union officers wary of backlash were openly discouraging drivers from participating. But other leaders held them off. They had signed-up a majority of the city’s drivers for the first time — over 400 paid union members — and wanted to use their new power.

The union’s new activists, together with a few elected officers, met at a coffee shop adjacent to the city government building to rehearse their talking points, gather together their signs and practice their chants. Most were nervous. Would their fellow drivers show up for their first public action?

Half an hour before the agreed-to time, drivers began circling the building. By 5:30 p.m., traffic was at a crawl for blocks, with a sea of yellow and blue cabs honking and surrounding the building. A half-dozen TV news crews gathered for the group’s press conference. The activists realized they had a new organizing problem: Convincing the drivers to get out of their cabs. They were having too much fun circling the building, honking and cheering. (They did, eventually, and packed the hearing room, demanding the city address Yellow Cab’s proposed new policies.)

By the end of the week, multiple council members had gone on the record for the first time endorsing the idea of a cap on driver fees. And Yellow Cab announced it was rescinding its new policy and would hold monthly meetings with drivers to hear their concerns.

Not all of the union’s leadership had been won over to the new strategy. But the union now had a permanent “action team” of activists primed for confrontation — what Waging Nonviolence columnist George Lakey would call the group’s “official rebels” — and a much changed political landscape more sensitive to their demands.

A new coop

In early 2016, taxi drivers and their allies convinced the city council to require fingerprinting and background checks for Uber and Lyft drivers — two of the requirements for driving a cab that both companies’ drivers already do in New York. In response, the companies bankrolled a ballot initiative to overturn the city’s new law. They lost the vote in May, prompting both to follow through on their threat to pull out of Austin entirely.

With the two largest ride-sharing companies out of the picture, Austin’s taxi drivers finally had a reason to believe they could fight for a living wage by winning approval for a driver-owned cab company. After months of advocacy, the city council gave them the permission to create ATX Coop Taxi, the city’s fourth cab company. The drivers were ecstatic. After 18 months of organizing, they had driven their most urgent threat out of the city, and won a new way to control their wages and working conditions.

When it opened last month, ATX Coop Taxi — which has already raised over $425,000 in ownership shares from over 360 coop members — became the third-largest worker cooperative in the country. Drivers will see immediate savings. Driving for Austin’s other three cab companies costs the workers from $250 to $315 each week in “terminal fees,” while the coop’s weekly rate is just $131. In their first weeks with cars on the road, the new coop already controls a third of the taxi permits on the market.

“We were paying out more than we could take home. It’s insanity to work 16 hours a day like that,” said Dave Passmore, president of the new coop. “That’s why we’ve been building this, to have a company for the workers.” The drivers expect to reach 400 paid members in the next month, and are allowed to expand to 650 coop owners if they meet conditions set by the city. They are also working on adapting the CABiT app — designed with and for taxi drivers — to better attract local customers.

Although the drivers can share credit for their success with many organizations that helped them along the way, the momentum they built through conflict two years ago was surely a factor. And given that they are likely to be tested again — the city council hasn’t given up on ride-sharing companies that don’t play by the rules — their experience dealing with internal and external conflict will likely help them on the long drive ahead.